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Jul 10, 2017 | 01:45

Exports fuel debate over German strength

German exports rose more strongly than expected in May, outpacing a solid increase in imports and widening the trade surplus of Europe's biggest economy, data shows. As Sonia Legg reports, some are now urging Germany to invest more to help the rest of the euro zone.

TRANSCRIPT +

The clean-up could be costly but Germany it seems can afford it
The economy has been powering ahead in recent months - the clashes during the G20 summit a mere blot on an otherwise pretty impressive landscape.
German exports continued the trend - seasonally adjusted figures climbed a better than expected 1.4 percent - their fifth consecutive monthly increase.
(SOUNDBITE) (English) WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, RICHARD HUNTER, SAYING:
"The economy is looking so strong on its own that there have been calls for the German government in terms of Berlin actually to be increasing investment in terms of getting some more imports into the country. And of course in an effort to rebalance the overall European economy somewhat."
Germany's revving engine hasn't gone unnoticed.
Just last Friday the IMF repeated its call for Berlin to increase investment to boost imports and support others in the euro zone.
It's raised its real terms growth forecast for Germany to 1.8 percent in 2017.
(SOUNDBITE) (English) WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, RICHARD HUNTER, SAYING:
"The Germans by definition tend to be rather more cautious in their approach than they have historically been opposed to things like QE because they have had bad experiences with the inflation in the past so I'm sure the Germans will take the comments of the IMF on board but whether that actually translates into hard action remains to be seen."
Germany's political influence is also growing.
And it all helps promote the 'Made in Germany' brand.
Demand for German goods from countries outside the EU rose the most, with unadjusted trade figures showing exports to China, Japan and the United States soared more than 17 percent.

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